This breakfast briefing will take a look at the outlook for the risk reduction market - looking in particular at how schemes can best prepare to conduct an insurance transaction, capacity in the market as well as the key factors that are likely to affect both pricing and demand.

Professional Pensions Investment Conference has gathered a great following and is a widely respected event which brings together senior decision makers within public and private sector pension schemes.

So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap,' ‘pension freedoms' or consultations around ‘value for money', says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).

In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.

South Africa: More clarity in sec lending will spur growth

Proposed rules around how trustees treat the securities lending programme within their portfolios will provide a boost to the South African market, said Llewellyn Ford, head of securities lending and futures clearing at Standard Bank.

The updated version of Regulation 28, which governs pension funds’ investment practices, went into effect on 1 July, but details around securities lending won’t be incorporated until next year.

However, if draft guidelines are approved, they will provide more clarity for beneficial owners who are “still wary of securities lending”, Ford told attendees.

“We’ve seen regulation 28 coming out now and we welcome that. One of the benefits (of the draft regulation) is that beneficial owners need to look at their administration and their policy in terms of securities lending programmes.

“If they are outsourcing those programmes, they’re going to have to work with those agent lenders to develop a policy. How do trustees monitor that? How are those programmes audited, etc? That’s going to help us alleviate the fears around securities lending,” he said.

The draft regulation also emphasises the need for trustees to fully understand and be able to monitor any risk associated with the securities lending programmes.

The draft regulation also encourages more transparency around the identity of the underlying borrower.

“So if you have a beneficial owner, you need to disclose who the borrower is to them and vice-versa. A lot of us have been participating as principals because we don’t disclose the underlying borrowers,” said Ford.

He said Standard Bank is working with regulators to get a formal draft finalised. The South African securities lending market has suffered since the start of the global financial crisis, but the drop in assets on loan has not been as severe as in other regions.

According to data by Standard Bank, securities on loan in South Africa currently total ZAR100bn ($14.5bn), down 37% from its 2007 levels of ZAR160bn. Globally – with the US, Europe and Asia serving as the main markets – assets total $2trn, down 63% from their 2007 levels of $5.5trn.

However, Ford expects to see growth in other developing nations.

“Obviously we’re seeing markets like Australia and Africa grow. We’re looking at expansion in some of the more developing markets, so Nigeria, Ghana, etc. So we’re looking at broader Africa growth,” he said.